Fears of a global recession are growing. Stock markets are jittery and American bond prices are rising as big investors consider them a safer bet than shares in troubled times. The outlook for interest rates has changed too.

At the start of the year, rates were expected to start rising around the world. Now they are widely expected to stay at record low levels.

Gold thrives in this kind of environment. It is the ultimate safe-haven purchase, the asset that people buy when they are nervous about the future.

Did you know? The gold price has risen almost 20 per cent this year alone and now stands at more than $1,500 (£1,250) per troy ounce, a level not seen since May 2013

The gold price has risen almost 20 per cent this year alone and now stands at more than $1,500 (£1,250) per troy ounce, a level not seen since May 2013.

A rising gold price is not just good news for investors who have been storing piles of bars and coins.

Based in Vancouver, Canada, the company was listed in London in May and has just secured $90 million of funding from Sprott, a highly experienced Canadian group that finances small mining firms.

The cash is a ringing endorsement of Pure Gold's mining project at Madsen Red Lake in Ontario.

Construction has now started and Pure Gold expects to be in production by the end of next year, producing more than 100,000 ounces of gold annually by 2022.

The speed of production is unusual, but Madsen Red Lake is an existing mine that was mothballed when the previous owners fell into financial difficulties. Pure Gold bought the site at a bargain price and now looks set to reap the rewards.

Madsen Lake has several points in its favour. Ontario has been a mining state for the past 100 years, so locals understand it – there are plenty of skilled workers and supplies are easy to come by.

The surrounding infrastructure is all there, and Madsen's previous owners had already built a processing plant and mineshaft so Pure Gold will be upgrading the site rather than starting from scratch.

Permits were also in place and the company has signed an agreement with local indigenous people so they are in favour of the Madsen project.

The rock is unusually rich too, yielding about 8 grams of gold per ton of rock, compared with 1 or 2 grams per ton in many mines.

Midas verdict: Mark Twain allegedly described a gold mine as: 'A hole in the ground with a liar standing on top of it.'

Sadly, too many mining firms seem to fit that description. Pure Gold, however, is made of better stuff.

The mine exists, the money is there to build it and the company is run by highly experienced industry veterans.

The group also counts mining giants AngloGold Ashanti and Newmont Goldcorp as shareholders. The shares are 41p and should go higher as Pure Gold moves towards production. Buy.

Fact: A rising gold price is not just good news for investors who have been storing piles of bars and coins. It also benefits gold mining companies, many of which have been struggling for years, but are now beginning to find favour with the stock market again

MIDAS UPDATE: Our Azerbaijan tip tripled your cash

Anglo Asian Mining has had an exceptional year. Midas tipped the Azerbaijan-based gold, copper and silver miner in September last year when its share price was 44p. Today, the stock is £1.38, so it has more than tripled in 11 months.

The performance reflects a concerted effort by management to increase production, bring down costs and generate cash. Last year, production rose 17 per cent to 83,000 ounces, profit rose fourfold to $25.2 million (£21 million) and the group paid a maiden dividend of 5.7p.

Production of 86,000 ounces is expected this year with further strong profits and dividends.

Even as the firm delivers profit from existing mines, it is actively exploring for more gold in the surrounding area. Brokers at SP Angel believe production will improve steadily over time, which should translate into consistent shareholder returns.

Midas verdict: Investors who bought Anglo Asian shares in 2018 have been well rewarded. They may now choose to sell a third of their stock and bank some profit.

But they should not sell out completely, as the business is well run and the rising gold price should boost the company's results.

Automated mine pioneer looks set to be a winner

Resolute Mining joined the London market just two months ago, but the firm has been operating in Australia for 30 years, during which time it has mined more than 8 million ounces of gold.

Despite this strong performance, shareholder returns have frequently disappointed. Now chief executive John Welborn is hoping to change that dynamic, creating a mining company that both produces plenty of gold and creates value for investors. The strategy sounds almost stupidly simple, but it is woefully rare in the mining world.

Welborn is doing well so far. When he was appointed four years ago, the business was drifting and the share price in Australia was the equivalent of 18p. Today, the stock is 99p and the group is on track to produce 490 ounces of gold from three mines – in Mali, Senegal and Queensland.

The site in Mali – Syama – is especially noteworthy. It is the world's first fully automated underground mine so it is safer, more efficient and lower-cost than traditional mines.

The Senegalese site was acquired last month, to widespread approval from City brokers.

Looking ahead, Welborn is keen to buy more in Africa, creating a portfolio of about six mines. Talks are underway but Resolute intends to be patient and highly selective, only doing deals that will genuinely boost shareholder returns.

Profits are expected to more than double this year to more than £150 million and Resolute pays a dividend too, with 1.6p forecast for this year, rising to 2.8p in 2020.

Midas verdict: Resolute has already done well in London but, at 99p, there should be plenty more upside in the stock.

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